Posts Tagged ‘credit card theft’

Today’s world is a place where anyone can be connected with anyone else, and for any purpose. This means that you can connect with a long-lost friend or relative, you can connect with someone for business purposes or you can connect with someone in order to commit a crime.

And thanks to the Internet, anyone can purchase a device to help them obtain the financial information needed to comment credit card fraud. For less than $100, a thief can obtain a skimmer online, then use it to drain an unsuspecting victim’s bank account.

A skimmer is a device that can be attached to an ATM machine or gas pump, or even to a point of sale machine inside a retail store. The device captures the card’s data when the card is swiped, and records it. On ATM machines, criminals often install tiny cameras, in addition to the skimmer, to capture the victim inputting a PIN.

Once the information is collected, it can be used by the thief who collected it, sold on the black market, or the information can be used to make cloned cards, which can be used by the thief or sold for cash.

Skimming has become a billion dollar industry. Cloned cards have been used to withdraw more than $1 billion all over the world in the past decade.

Protect yourself and your cards. Cover the PIN pad when you input your number. Check the machine thoroughly before you insert your card, to be sure nothing is amiss. Pull on the card inserter, and poke at the PIN pad. If something is loose or seems out of place, report it immediately and do not use your card in that machine.

When it comes to financial identity theft, there are basically two types: new account fraud and account takeover. New account fraud happens when someone opens a new account in your name and then doesn’t pay the bill. Account takeover happens when a person gets your financial information and uses it to take over your existing credit or bank accounts.

But thieves also use a technique called “ghosting,” in which they create fake Social Security numbers. Once a phony SSN is used successfully the first time, the thief can then use it to create new accounts, obtain jobs, get mortgages, buy cars, etc.

It’s not uncommon for the thief to have a little inside help. The thief will sometimes pay an employee at a store in order to manipulate the system and obtain a store credit card, which he will then use to establish the credit he needs to obtain more accounts.

It’s also become a common thing for store and restaurant employees to use skimmers to scan credit and debit cards to steal the information for their own use. It’s easy to do: they simply scan the card in the point of sale machine the store issued like they’re supposed to, but they also quickly scan the card through the skimmer as well, out of the sight of the card owner.

This is why it is important whenever you use your credit or debit card in public to never let it leave your sight. When in a restaurant, ask if the card can be processed in front of you, or go with the waiter to watch as he scans it. Same goes for a retail situation.

Doing this may get a few strange looks or a little attitude thrown your way – but it’s worth it if it keeps your card protected.

A new study by the U.S. Department of Justice shows that more and more Americans are falling victim to identity theft. In 2010, an estimated 8.6 million households experienced some form of identity theft, up from 6.4 million in 2005.

Households headed by a person 65 years of age or older had the lowest rate of identity theft, 3.3 percent, about half that of other age groups, the DOJ findings stated. Households in the highest income category, $75,000 or more, are far more likely to experience identity theft, 12.3 percent, than those with poorer income. Over half of the households that experienced identity theft reported no direct financial loss.

Most of the increase in identity theft is attributed to the unauthorized use of credit cards, but it also includes the misuse of banking, savings, PayPal and other types of financial accounts as well.

According to DOJ findings, consumers experienced about $13.3 billion in financial losses due to identity theft in 2010, which the average loss per person falling somewhere around $2,200.

The report comes just in time for the holiday season, and offers a sobering reminder to shoppers this year.

During the rush of the season, it’s easy for consumers to become complacent regarding the safety of their financial and personal information. Thieves know this, and definitely take advantage of it.

To reduce your risk, avoid using debit cards, and instead use only cash or credit cards. Debit cards are linked directly to your bank account, while credit cards offer consumer protection. Consumers should also keep their eyes open for skimming devices, which can appear everywhere from ATMS and gas pumps to point of sale machines in department stores and restaurants.

Many shoppers are using their smartphones while out shopping. Doing so raises the potential for identity theft for consumers. Don’t shop remotely on unsecured networks, make purchases at unfamiliar websites, and be sure to check your account statements.

According to the National Retail Federation, more than 100 million Americans will shop today, Cyber Monday. And shoppers are being urged to be extra careful, so they can avoid identity theft and fraud. Here are some tips to help you stay safe.

First, stick with online retailers you recognize. Don’t shop at sites you are unfamiliar with. If you run across a site that bears an unknown domain name or is misspelled, that’s a huge red flag – move on to a different site.

If you find an item you wish to purchase, make sure that the site is secure before you enter your credit card information. You’ll know it’s secure if you see “https” in the URL instead of just “http.”

You should plan to use your credit card to shop, rather than your debit card. Your debit card is a direct link to your bank account. Credit cards provide greater consumer protection and less liability.

If you are physically shopping at a store, make sure you only carry the credit or debit card you need. Do not carry extra cards, your check book, or Social Security card with you. If your wallet is stolen or lost, you’ll be out of luck if it’s full of this extra information.

Last of all, make sure you check out any machine you are using before you swipe your card. Thieves are using devices called skimmers, which can be attached to point of sale machines in stores, ATMs and even gas pumps. Don’t swipe your card if the device looks out of place, and if you choose to use the device, shield your PIN or ask the cashier to run your card through the register rather than the card reader if the card reader looks strange to you.

A Detroit couple were stumped for weeks – a series of liquor store charges appeared on their debit card, and they had no idea how the charges got there.

About $150 in charges for various liquors were charged at four different small liquor stores in Detroit.

The couple finally saw a story in a newspaper about a woman who worked at McDonald’s, who was charged with stealing customers’ debit and credit card information while working in the drive-thru at the fast food restaurant. She used a skimming device to obtain the data.

The Detroit couple saw the story and immediately realized they had been victimized by the woman. After doing some research and looking at receipts, the couple realized they weren’t 100 percent sure the woman had stolen their information as well. But the incident was enough to teach them a lesson.

The couple spent more than a month trying to clear the mess up with their bank.

The thief in this case, used a simple technique: She held the device in her left hand and swiped the card with her right hand, out of the line of vision of the customers. The thief stole more than 100 customer credit and debit cards, and said she would steal the data from about 15-20 cards each shift she worked.

She received the skimmer from an unidentified source, who she said paid her more than $1,000 for providing the stolen data. For each card she skimmed, she was paid an additional $15. The thief now faces up to 15 years in prison.

When going through a drive-thru, it’s best to pay in cash. However, it’s not very practical in this day and age. So just keep your eyes open and never take them off your credit or debit card. Don’t let a restaurant employee take your card out of sight, for even a second. You could regret it, like the couple in Detroit, if you do.

Discover Financial Services is facing charges by the Federal Deposit Insurance Corporation over the way the company sells payment and identity theft protection.

In a regulatory filing last week, the credit card company said the investigation began several months ago, and that it is cooperating. The FDIC notified the company’s banking division, and a spokesman for the Riverwoods, Ill.-based company said action will be taken.

A series of lawsuits in various states have challenged the company’s marketing policies. Discover said in June it reached a preliminary global settlement int eh eight pending lawsuits, which are awaiting judge’s approval.

Credit protection makes up about 3 percent of Discover’s total revenue. The company’s shares have dropped 23 cents, since news of the investigation broke.

Be sure to check with your credit card issuer to see whether you are covered in the event of identity theft. Some credit card companies offer this protection, but there are some that aren’t all they’re cracked up to be. Charges vary, so be sure you are getting what you expect and what you are paying for.